Health Insurance/Access to Care

Description

Health insurance is a contract between an individual and an insurance company. The insurance
plan specified in the contract provides part or complete payment of specified health care costs
for the enrollee(s). Coverage of health care costs depends on the plan. Some plans are provided
by employers, some by government programs such as Medicare, and others are purchased directly by
individuals from insurance companies.

Health care spending includes the costs of obtaining a wide variety of goods and services, from
hospital care and prescription drugs to dental services and medical equipment. Most health care
spending is for care provided by hospitals and physicians.

Why It's Important

Most people need medical care at some time in their lives. Medical care is often quite expensive
and is becoming more expensive. Health insurance covers all or some costs of care and protects people
from very high expenses. People without health coverage have to cover all costs. This can sometimes
lead people into debt or even bankruptcy. Rising health care costs make insurance less affordable
for individuals, families, and businesses.

People without health insurance are more likely to lack a usual source of medical care, such as a
primary care provider. They more often skip routine and preventive medical care thus increasing their
risk for developing serious and disabling health conditions that cost more to treat.

Concerns about rising health care costs and affordability of health care insurance lead to enactment
of the Affordable Care Act, or ACA. The key challenge moving forward will be finding the best mix of
policies that promote health and prevent illness, and also ensure that government, corporate, and private
health spending is as efficient as possible and best meets the health care needs of the nation.

What Is Known

Health care costs per capita in the U.S. grew an average 2.4 percentage points faster than the GDP
from 1970 to 2012. In addition, the share of economic activity (gross domestic product, or GDP)
devoted to health care has increased from 7.2% in 1970 to 17.9% in 2010. In 2010, the U.S. spent
$2.6 trillion on health care, an average of $8,402 per person. Many experts believe that new
technologies and the spread of existing ones account for a large portion of medical spending and its
growth. The U.S. spends substantially more on health care than other developed
countries.1
Though the rapid growth in spending for prescription drugs has received considerable
attention recently, as of 2010, it accounted for 10% of total costs. Private funds are the largest
contributor to health care payments (55% in 2010 compared to 45% from government funds).

Health care expenditures in Utah have historically been lower and have grown more slowly than expenditures
nationally. Favorable demographics (younger population) and healthier lifestyles contribute to these relatively
low per capita health care expenditures. However, an aging and expanding population, medical technology
advancements, and the limits of managed care to contain costs may cause per capita expenditures to rise.
As a percentage of per capita income, per capita expenditures for medical care slowly increased from 1993
to 2009.

Health care insurance costs more today than ever. Health insurance premium increases have consistently
outpaced inflation and the growth in workers' earnings. And families are also paying more out-of-pocket
for health care. Concurrently, employer shares of payroll going toward health insurance costs continue
to rise. In addition, eligibility standards for public programs such as Medicaid and CHIP do not keep
pace with rapid increases in the cost of health coverage.

Who Is at Risk

All people are at risk of needing costly health care services during their lives. People without the
financial means and/or adequate health insurance coverage are at risk for not receiving the kinds of
health care that can optimize their health, especially as costs continue to increase and options for
care expand.

Health status is strongly associated with age. In general, health status declines with age. As health
status declines, there is more need for medical services. Those with worse health use medical services
more often. Women have higher medical services utilization than men.

How To Reduce Risk

Numerous studies show that a disproportionate share of health spending is used to treat chronic and often
preventable diseases and conditions. Efforts to improve population health could have a long-term effect
on disease prevalence and help reduce health care spending. Many of the Affordable Care Act (ACA)
provisions are an attempt to reduce the risk of illness and injury so that people won't require high
cost health care in the first place. A critical component of the ACA was the creation of the National
Prevention Council and the development of the nation's first ever National Prevention and Health Promotion
Strategy.2 The strategies are designed to move us from a system of sick
care to one based on wellness and prevention.

The plan outlines 4 Strategic Directions:

Healthy and Safe Community Environments

Clinical And Community Preventive Services

Empowered People

Elimination of Health Disparities

It includes 7 Priorities:

Tobacco Free Living

Preventing Drug Abuse and Excessive Alcohol Use

Healthy Eating

Active Living

Injury and Violence Free Living

Reproductive and Sexual Health

Mental and Emotional Well-Being

Other ACA provisions address health care costs and the ability of individuals to afford those costs including:

Changes to the way health coverage and health care are provided in public and private settings

A requirement (with some exceptions) that people obtain health insurance

Creates new sources of coverage through health insurance exchanges

Provides for premium and cost-sharing subsidies for those with low incomes

Significantly expands Medicaid eligibility

Makes changes designed to slow the growth of Medicare spending

Short-term cost containment provisions

Reduces payments to providers for Medicare services

Eliminates unnecessary costs such as fraud and abuse in Medicare and Medicaid

How It's Tracked

Health Care Coverage -
Estimates of the number of people who are uninsured are available from several different sources,
including a number of federal surveys. Four federal surveys provide this information.

The U.S. Census Bureau's Current Population Survey (CPS) - state-level estimates

The American Community Survey (ACS) - state and sub-state level estimates

The National Health Interview Survey (NHIS) - state level estimates for 43 states

The Medical Expenditure Panel Survey - Household Component (MEPS-HS)

In Utah, we track health insurance coverage using the Utah Behavioral Risk Factor
Surveillance System (BRFSS) survey. The BRFSS allows us to estimate the uninsured rate at sub-state
geographic levels, even to the community level (Utah Small Areas) in Utah's urban areas.

Utah DOH

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from the Utah Department of Health, Indicator-Based
Information System for Public Health Web site: http://ibis.health.utah.gov"

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